Juniper Spends $176 Million on Networking Start-Up Contrail

Juniper Networks just disclosed in an SEC filing that it spent $176 million to acquire Contrail Systems, a start-up said to be focused on software-defined networks.

There’s that phrase again: Software-Defined Networking, or SDN. There’s been a lot of activity in that space.

The basic idea behind SDN is that networking environments should be as programmable as other parts of the IT infrastructure. Networks have grown incredibly complex to manage and, more often than not, when more flexibility or capacity is needed, the answer is to buy more hardware. The more you can customize a network in software, the thinking goes, the less hardware you have to buy. SDN is also a departure from the way networking gear has generally been run before: Up to now, it has generally, with some exceptions, not been open for programmers to tinker with.

Last month saw the launch of Big Switch Networks. And Cisco Systems has been talking quite a bit of late about its capabilities in the area and investing in companies working on it, in part because SDN is seen as posing a long-term threat to its dominance of all things networking.

Other names in the space include Nicira, which launched this year, and was acquired by VMWare for $1.26 billion. Oracle bought an SDN player called Xsigo Systems in July.

Juniper isn’t saying much about the deal; the disclosure came in an 8-K filing with the U.S. Securities and Exchange Commission. Here’s what Bob Muglia, Juniper’s software head, had to say in a corporate blog post:

We’ve entered into an agreement to acquire Contrail Systems, a Santa Clara, California-based software networking start-up founded in early 2012, and we anticipate closing before the end of the year. With this acquisition, Juniper gains SDN technology that augments our portfolio of products and services. As a strategic investor earlier this year, we recognized the inherent advantages of Contrail Systems’ architectural approach and we are excited to take this next step to acquire and combine Contrail Systems into our team.

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